Stock Market Outlook for February 23, 2023
*** Stocks highlighted are for information purposes only and should not be considered as advice to purchase or to sell mentioned securities. As always, the use of technical and fundamental analysis is encouraged in order to fine tune entry and exit points to average seasonal trends.
Stocks Entering Period of Seasonal Strength Today:
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Vanguard Canadian Government Bond Index ETF (TSE:VGV.TO) Seasonal Chart
SPDR DoubleLine Short Duration Total Return Tactical ETF (AMEX:STOT) Seasonal Chart
Franklin Liberty Investment Grade Corporate ETF (AMEX:FLCO) Seasonal Chart
Intel Corp. (NASD:INTC) Seasonal Chart
NASDAQ Premium Income And Growth Fund Inc. (NASD:QQQX) Seasonal Chart
TopBuild Corp. (NYSE:BLD) Seasonal Chart
Sierra Wireless, Inc. (NASD:SWIR) Seasonal Chart
The Markets
Stocks struggled in the Wednesday session as investors digested the minutes from the last FOMC meeting. The S&P 500 Index closed lower by less than two-tenths of one percent, placing pressure on the rising 50-day moving average that stands at 3979. The confluence of major moving averages between 3900 and 4000 remain in a position to provide a backstop to the recent market slide and it would take a break of this zone to suggest an elevated risk of a further market downturn as we progress through this period of seasonal weakness that typically finds a low around the start of March. MACD remains on a sell signal that was triggered a week ago Friday and questions are arising whether the breakout above horizontal resistance at 4100 was legitimate given that it has not been confirmed by an equivalent higher-high in momentum. Despite the breakout above resistance to enter the month of February, we have maintained our Neutral rating of the large-cap benchmark, but we continue to search for opportunities to take directional bets, either bullish or bearish (see our weekly chart books for ideas and insight).
Today, in our Market Outlook to subscribers, we discuss the following:
- Dollar Index back on course with seasonal norms through the first quarter of the year
- The jump in global central bank liquidity for January
- The use of the Fed’s Reverse Repurchase Agreement facility
- Relative trend of the technology sector rolling over from declining trendline resistance
- Canada Consumer Price Index (CPI)
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Sentiment on Wednesday, as gauged by the put-call ratio, ended bearish at 1.14.
Seasonal charts of companies reporting earnings today:
S&P 500 Index
TSE Composite
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